Cash Back vs. Points: Are We Playing the Wrong Credit Card Game?
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Hello and welcome to another episode of All The Hacks, a show about upgrading your life, money and travel. I'm Chris Hutchins and I am a huge fan of points, miles and all the amazing travel you can do with them. In fact, there are plenty of episodes on this show to help you do just that. But a few things have been happening lately that make me considering whether I might be better off just focusing on cashback.

For longtime listeners, that might sound crazy coming from me, but hear me out and make sure you listen through to the end because there might actually be a third option that's even better. But no matter what strategy you want, I am confident this episode will help you dial in your setup even more. And I will also be giving you a little preview of an updated tool I built to help anyone optimize their credit card strategy. So let's get started right after this.

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Okay, for a little history, I love credit card points, especially with the kind that are transferable to different airline and hotel groups because you get so much more flexibility and it usually results in a much higher ROI. And also, there is something amazing about travel feeling free. There's just less guilt than when you spend money. And if I just think about a specific example, spending 150,000 points on an international business class flight is nowhere near as hard as

as spending $1,500 to $2,000 might be. Also, it forces a type of luxury I'm not sure I would otherwise treat myself to, which maybe that's a good thing, maybe it's a bad thing, I'll let you decide. So for over a decade, I've racked up over 10 million points and taken so many vacations with those points that I couldn't imagine ever wanting to switch to a cashback strategy. However, three big things have changed recently that are making me rethink my whole credit card strategy.

First, I look deeper at a few cards, notably the Bank of America Premium Rewards card, the US Bank Altitude Reserve, and the new Robinhood card that is going to offer 3% cash back on everything. Though just to be clear, there are some skeptics of how long that will work for. However, right now it is a 3% on everything card. The second thing is that I've been watching a bunch of points get devalued. So if you're sitting on Turkish Air points,

they're probably feeling a lot less valuable. That happened to Alaska. It happens all the time. But when I look at the cash in my Wealthfront Cash account,

It's going up by over 5% every year. So I've been reflecting on points getting less valuable and cash getting more valuable and the fact that I haven't spent as many points as I've accumulated in the last few years. And then number three is a big one. I watched some points go on sale this year and I realized there are a lot of different ways that you can get points than just by earning them on a credit card. For one, many airlines and hotel groups constantly have sales on points.

For example, of my 12 favorite transfer partners from my credit cards, points go on sale for as low as 1.15 to 1.2 cents, and that's on LifeMiles or Aeroplan. And on average, across all the partners that sell points, they go on sale for about one and a half cents per point.

And depending on the partner, they go on sale as often as every one to three months. And then there's some points that I don't actually even like transferring to, though I do think they have good value, that go on sale for as little as half a cent a point like Hilton or close to that for Choice Hotels and Marriott. So I just want to bring an example here. I was looking at this United flight from New York to Geneva in business class, and it was about $5,000 if you paid cash. But

But it was only 63,000 miles with Avianca's LifeMiles. I assume very few people listening have a LifeMiles balance, but you can transfer Amex, Citi, CapOne, Bilt, and Wells Fargo points to LifeMiles, which means most of you listening actually do have access to LifeMiles and could get almost 8 cents per point with that flight. However...

You could also just go buy 63,000 life miles right now while they're having a sale, which by the way, they did 13 different times last year, and those miles would be $825. So you don't actually even need to have a points balance right now to take advantage of the arbitrage you can get in booking a flight with points. In fact, in this example, transferring 63,000 points doesn't

Two life miles, when you could otherwise buy them for $825, means you're only getting 1.3 cents of value, which is nothing like the 8 cents you might be thinking when you go through this process. To go one step deeper on this example, let's assume you earned those 63,000 points on a 2x points card after you spent $31,500. Well, to get the $825 you'd need to buy those same number of points,

With the same $31,500 of spend on a cash back card, you'd need to be earning at least 2.62%, which is really actually a funny number because it is almost the exact percent cash back you can get on all purchases with the Bank of America premium rewards card, assuming you have $100,000 at a Bank of America or Merrill Lynch account.

And if you had the 3% card with Robinhood, you'd earn even more on that amount of spend or you would need less spend to earn $825 of cash back. But don't jump to conclusions. I am not done with this episode and I'm going to go a lot deeper on all of this and I might actually change your opinion a few times before I'm done. However, I was talking about buying airline and hotel points for less than one and a half cents, but having points in an airline or a hotel chain isn't necessarily as flexible as

as having them in Chase or Amex or somewhere where you can transfer them to lots of different partners. If you look at the value people give to Chase or Amex or BuiltPoints on the internet, you'll find that that value is actually higher than the value of any of the points you can transfer to individually and that is because there is an inherent value in having that flexibility. Knowing that if one program devalues, you still have the access to all the other programs. However,

Chase, Amex City, none of these programs ever sell their points. But the more I thought about buying points, the more I wondered how much would it cost to buy them in another way, to effectively buy them. And I realized for anywhere from half a cent to one and a half cents, using your credit card to do things like pay taxes, buy gift cards, especially if you have to save for college or pay off student loans,

or even just pay bills or send money to friends online when you have to cover the 2.9% fee. And I'm going to do a whole episode on earning more points without needing to increase your spending soon, where we'll go really deep on those and so many more options.

But for that last example, if you were to pay a 2.9% credit card fee to be able to send $10,000 to a friend or pay a $10,000 property tax bill and put it on your card, and let's assume you're putting it on a card like the VentureX that earns two points per dollar, you would get 20,000 points for that $10,000 spend and you would pay a $290 fee. So that's

That means you'd be getting 20,000 points for $290 or paying 1.45 cents per point. Now, if you aren't able to get more than 1.45 cents in value for each one of your points, I wouldn't suggest doing this because cashing out those flexible points usually only gets you about one cent per point or $200 back, which is definitely less than the 290 you spent to get them. While that is more work than just earning and having those points, it also means you

that even if you can regularly find ways to get two or even 10 cents of value, booking, business class travel, staying at luxury properties, you probably shouldn't use those points values when you're comparing the points values you earn on credit cards with cash back. Because...

you can always find ways to effectively buy those same points, whether it's buying through airline and hotel programs when they go on sale or using methods like I just mentioned to buy flexible points. And then you can actually get that same two to 10 cents of value. So this was a really big change in the way I thought about things because

They let you take travel that would otherwise be much more expensive and get access to it for much less. But it's not actually earning the points and miles that makes it the better deal. It's actually just having them. So if you could go out any time of day and just buy Chase Points for one cent per dollar, which you can't, but if you could, I wouldn't need to earn Chase Points at all because I would just buy them right before I was about to book a flight. And if for some reason I wanted to take a trip and the points weren't an option, then I wouldn't buy the points and I would have to pay cash.

So for the sake of comparing and valuing points to cash back, it really depends on how many of these different methods you could use to get points and the scale of the points you need. For example, if you have to make lots of tax payments each year, where the fee to pay with your credit card is only 1.82%, which means you can actually effectively buy points for less than one cent. Well, if that's you and you pay lots of tax payments and you're actively saving for kids' colleges or paying off student loans,

and you only think you really need 100,000 points a year, then yeah, maybe you probably don't need to value them at much more than one cent, in which case cash back might end up being a better strategy, and we'll get there. But if those things aren't true, maybe the amount you should be valuing points at is probably closer to one and a half cents. Or if you're spending millions and millions of dollars a year on a credit card, and you're trying to rack up just a massive amount of points that you could never get in other ways,

then maybe none of these tactics to buy points will work for you and you really need to pick something closer to the value you redeem them at. So maybe that's two or three cents a point. For the sake of this episode, I'll probably use a number about one and a half cents because it's kind of right in the middle. So in short...

There is no debating that booking some flights and hotels, especially when you're traveling internationally or when you want to stay at these aspirational vacations or flying these premium cabins, doing that with points and miles will give you an incredible deal over booking with cash.

assuming you're flexible enough to find the right inventory, but I want to explore whether it's a better deal to focus on earning cash back and buying those points when you find the right deals, and if you never do, then you already have the money to buy those flights in cash.

That's what I want to compare. So the purpose of this episode is to make a steel man case for cashback, which just to be clear, doesn't necessarily mean as I'm making it that it's 100% my stance. I kind of feel like I'm in a debate club here, though I might actually end up convincing myself by the end of this, but I will make sure to include my perspective before we're done. So let's start with the basics.

Just like points, cashback is tax-free. It's considered a rebate, so you don't have to worry about that. A great pro to cashback, you can invest all the cashback you get and earn 5% or more per year. It is totally flexible. You can use it to buy points. You can use it to pay for anything. You have ultimate flexibility and liquidity when you get cash, including, like I said, buying points. And

And there is no stress about not being able to find a good deal with points and miles on your vacation because you don't have a massive balance of points. It also means you don't need to keep paying annual fees on cards just to keep your points balance alive. So, a lot of reasons to like cashback. Let me run through a few of the cashback cards.

Actually, before we run through all the cards, there are timestamps in the show notes. So if you want to jump ahead to go to the meat of the discussion and then come back later and listen to the rundown of the best cards in each categories, feel free to jump around. We always put those timestamps there to make it easy to find different chapters or sections of the conversation.

So for just general overall spend right now, I can't think of any better card than the Robinhood card that's coming out. It's 3% on everything. I don't have it yet. According to Robinhood, if you use my link, which is allthehacks.com/robinhood, I will move up the wait list. It's not an affiliate link or a sponsor link or anything like that. So that right now seems to be the leader for overall everything spend.

The leader before that was the Bank of America Premium Rewards Card, which got you 2.625% on everything. And that is because they have this weird program where you earn 1.5 points that are all worth one cent. But if you have diamond or platinum honor status with Bank of America, which you get by having $100,000 in a Bank of America or a Merrill Lynch account, and that doesn't even have to be managed by them. It can be self-managed.

Then you get 1.75 times the number of awards, which is where you get to that 2.625% number. So that's previously been the best card. There are also a couple of cards that for your first year, you can earn 3%. Discover has a card. The Chase Freedom Unlimited had a promo where you normally get 1.5%, but at the end of the year, they would match it.

And supposedly that went away, but the link we have in the show notes seems to still show it at least as the time of recording. So those are kind of the best everything cards. The next set is cards that give you higher cash back, but only on one or two categories. And depending on the card, you might have to pick the category in advance or it's your top spend category. And depending on the card, some of them are capped at $500 a month, some of them at $2,000 or $2,500 a quarter. But some of those are the U.S. Bank Cash Plus card, the

the Bank of America customized cash card, the Citi custom cash card. Those are a few. And you basically get to either pick or spend in a category. Could be a 5% cash back on gas station card or restaurants or grocery stores, whichever one. But that spend is usually capped at somewhere on the order of $6,000 to $10,000 a year of spend. So if you spend...

$25,000 a year on groceries, you can't really call it a 5% grocery card 'cause you're only getting that premium return on the first $10,000 or maybe 6,000 depending on the card. There's two cards, the Discover It and Freedom Flex that do a 5% on rotating categories each quarter. So if you happen to line up the category with where you're spending, it can be good, but you don't know in advance what those categories are. Then if I run through different categories, there's some really interesting cards. So the Amazon Prime card, if you're an Amazon Prime holder,

Gets you 5% back on Amazon and Whole Foods. Next is the U.S. Bank Altitude Reserve Card, which is one I actually feel like I've been sleeping on here, and I'm not sure why, but I'll talk about it a bit in this episode. And it gives you 3x points, which are worth 1 cent, so 3% cash back on travel spend and on mobile wallet, meaning Apple Pay, Google Pay, all of that.

I've been told that it also works if you use Apple Pay in the browser, but not Google Pay in the browser. But 3% back on Apple Pay is something I have never seen and didn't realize was there until a few months ago as I started digging into this topic. But U.S. Bank has this program called Real-Time Rewards, and how that works is...

If you spend money on your card in the travel category, that could be an Uber, it could be buying a ticket. They send you a message and say, hey, if you want to redeem your points right now, we'll give you one and a half times the value. So that means that assuming that you spend enough travel on the card such that you can use your points to cancel out that travel, which is different than a chase bonus where you have to spend those points in the portal and book in the portal. U.S. Bank also does that.

but you can just book the travel and they'll let you credit it off your statement. So that makes mobile wallet and travel spending 4.5% cash back.

which is really, really amazing. I've actually heard people booking travel, redeeming the points to credit it off and then canceling it if it's a refundable airfare and then still being able to keep the points. But I don't think it would be that hard to make sure that however much you spend on the card, you put four and a half percent of your spending into the travel category. If you're listening to this show, you're probably someone that spends at least that much on travel.

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In the dining category, there are so many options, so I'll run through them quickly. The Capital One Saver is 4% on dining. The U.S. Bank Altitude Go is 4% on dining. But now I'm going to mention one that doesn't seem like a cashback card, which is the Amex Gold. And Amex Gold is 4x points on dining. And I wouldn't think of it as a cashback card, but you can cash out Amex points in lots of different ways that give you at least one cent of value.

some gift cards, booking travel in the portal, including booking things that are refundable and canceling them. You just get cash back instead of your points back. But even better, if you have the Schwab Platinum Card, you can actually take all of your Amex point balance and transfer it to a Schwab brokerage account and get 1.1 cents for all your points. So if you had the Schwab Platinum Card and the Amex Gold,

you'd effectively be getting 4.4% cash back on all dining. There's a lot of other cards in the 3.5%, 3% and down range, but that's a little overview. In the travel camp, on flights, again, the Amex Platinum, that Schwab Platinum also, 5x points. Or if you cash out to...

Schwab, 5.5% cashback. So I could think of the Amex Platinum as a 5% cashback card or Schwab Platinum as a 5.5% cashback card. The new Wells Fargo Autograph Journey card is 5% on hotels back and 4% back on airfare. The Altitude Reserve, like I said, 4.5% back on travel. This Chase Sapphire Reserve, depending on whether you value the points at statement credit value, 3x points would be worth...

3% cash back or if booking in the travel portal means that you feel like you can consider those cash back because you could just buy a flight and you don't need to transfer it to airlines and find availability then the Chase Sapphire Reserve is also 4.5% back on travel and rewinding 4.5% back on dining because the Chase Sapphire Reserve card gives you points worth 1.5 cents in the Chase travel portal. So 3 times 1.5 that's where I get the 4.5%. Gas, I

I did a little bit of research. Seems like the best card is the Abound Credit Union Visa card, which has 5% back on gas with no cap because we have electric vehicles. Not a category I've spent a lot of time on.

Groceries, big category for lots of people. The Amex Blue Cash Preferred, 6% back on $6,000 a year. The Verizon card, which only works if you're a Verizon customer, is 4% back on groceries. Then there is a AAA card that gives you 5% back up to $10,000 a year. And then, like I mentioned earlier, the Amex Gold, up to $25,000 of spend on groceries. You get 4% back or 4X points that you can convert for one cent.

Or with that Schwab Platinum, it's like 4.4% back. Last in the kind of internet cable phone bill category, the Ink Cash is 5% back there. And then there's a BMO cashback card that's also 5%. So now that I calculated all the best cashback cards, I really wanted to figure out if cashback was a better deal. So I went back to the card optimizer spreadsheet tool I built last year and I completely rebuilt it from the ground up.

I probably spent 40 hours or more on it and added so much functionality. So for those that don't have it already, here's how it works. You add roughly or exactly however much you spend in a bunch of different categories and you check off all the cards you have. I think I loaded 42 in the system and it will tell you the return you're getting on your spend net of all the annual fees. But more importantly, it'll let you simulate what things would look like if you add or subtract cards.

So you can find the best combo of cards for your spending pattern. And with the upgraded version, it does a lot more. Most importantly, it'll let you set a specific goal of whether you want to earn points, cashback, or whatever maximizes your return based on how you value points. Then I added a bunch of the cashback cards like I mentioned above, including adding spending caps and the ability to pick which categories you want.

So if you pick the Citi Custom Cash, you can say, give me my 5% back on gas or groceries. And when it tells you which card to use for a category, it will tell you a backup if you spend more than the cap allows. I also added in some toggles. So if you choose a Bank of America card, it'll ask you what status you have or things like that. And finally, it shows you which card to use for every single category and tells you how much you'll be spending on each individual card.

So if you want to follow along, you can access that tool as well. It's live on the site right now at allthehacks.com slash card tool. As for the impact this tool can have, I'll just give you my personal experience because after all, I built the tool I wanted to use. And when I plugged in my own spending and my own cards and looked at the gaps I had, I found that by tweaking my spending and adding just one card to my lineup,

I'd earn an extra $500 per year and a second card would bring that up to $800 a year, which at least for me is a meaningful amount of money worth doing something. So like I said, you can get the tool today. There's a full video walkthrough on the website. It's $48, but until May 10th, you can use the code LAUNCH for $10 off. However,

If you already bought the first version of the optimizer tool, check your email because you'll have a special coupon code that adds $10 off to however much you paid for the first version. So if you paid $10, your new code will be for $20 off and everyone that paid more than $38 for the first version

We'll have a coupon code to make it free. Or even better, if you're already an All The Hacks member, you can get the tool completely free on the member site. Or if you want to join and get the member tool for free, you can do that at allthehacks.com slash join. And as a member, you'll also get to join our monthly member calls and get access to all our member exclusive deals like a free year of Kubera, 50% off trust and will, and a lot more. So two different ways to get access.

And I really want to know what you think. I spent so much time and energy building this tool, and it's been super valuable to me. I hope it's valuable to you. Of course, you can find the link in the show notes again. It's allthehacks.com slash card tool. And so after building it, I decided to use it, both with the Bureau and Labor Statistics data for a family in the top 10% of spending, which turns out is about $80,000 a year, and for myself. And here's what I learned.

For most people, you actually get 90% of the value with just four cards. I know that sounds crazy. A lot of us, myself included, have more. But for the purpose of this comparison, I'm just going to focus on four card combos.

However, thinking about card combos gave me an idea to actually do an episode running through each issuer, so Chase, Amex, Citi, and talking about the best cards and the best card combos within each. So stay tuned for that. Obviously, your spending patterns might change the calculus. Fortunately, you could use the tool and go in and put whatever spend and cards you want and get an even more granular version of what I'm about to share.

Four team points. The four cards were the Amex Gold, the Amex Platinum, the Sapphire Reserve from Chase, and the Capital One Venture X. And for team cashback, we've got the Amex Gold,

the Schwab Platinum, the Altitude Reserve, and the Robinhood card. Like I mentioned earlier, if you're thinking Amex Gold is a points card, that's not a cashback card. Yes, but you can redeem those points for cashback. You pair it with the Schwab, that makes it a 4.4% dining and grocery card. So that's pretty cool. It also means flights is a 5.5% back. Now, I get it. Maybe you're on team cashback and you don't want the hassle of converting points back into dollars. So I'll give you a couple backups there.

On the travel side, you could just do the altitude reserve, which is 4.5% cash back. On the dining and grocery side, I would say your best bet is probably either the Verizon card for 4% back on groceries or the Capital One Saver for 4% on dining and 3% on groceries. Those are a couple of good options as a fallback if you don't want to assume that you can convert Amex points to cash through the Schwab Platinum card. So,

Those are the main cards. Here's the analysis. If I ran about $80,000 of spending, then team cash back is at $2,965 of cash back, and the points would have been 210,652 points. So effectively, that trade-off means you're buying points for 1.41 cents.

And for the sake of the example, I'll just round 2965 to 3000, 210,652 to 210,000. When actually when I went in with my own data, which was a lot higher spend and a lot of different categories, it was about the same at 1.45 cents per point. You could argue that if you value transferable points at one and a half cents, then you're getting a better deal with the points. I also wanted to look at the opportunity cost of if you chose one path and wanted the other.

Let's say you went with cash back and you decided you later wanted points. Worst case, if you took out that $3,000 that you saved and you used it to pay a 2.9% fee to send money or pay bills, you'd be able to cover $103,000 of spend. So let's assume you put it all on a 2X card like the VentureX. You would end up with 206,000 points.

which is just 4,000 points less than you would have had if you had gone for points from the start. However, a few notes. Like I said before, if you have less expensive ways to buy points, let's say you're always making estimated payments on taxes, or you are finding deals on flights where you can buy points like you could LifeMiles points for 1.2 cents, then you would actually end up with way more points. And also,

And also, if you don't need the points right away, you could be investing all your cash back, getting a 5% return, which in less than a year would grow to enough cash, you would end up with more points as well. However, I don't know anyone who has a $100,000 limit on their card, so actually turning $3,000 into over 200,000 points would take some time and some effort, but you would get back to about the same place if you had gotten points in the first place.

So let's reverse that. What if you earned points and then later wanted cash back? Well, that 210,000 points, I looked at each one of the different types of points you would have earned and the best ways to cash it out, even if you're perfectly optimal, meaning you have the Schwab Platinum, you get 1.1 cents per Amex point, you consider booking travel in the Chase portal as a way to cash out, so you get one and a half cents there, you end up at $2,300 in cash.

While transferring your $3,000 cash back gets you about the same number of points, transferring your points gets you about $700 less in cash back.

So you're down about 25%. My immediate reaction to all of this was a bit of shock. Have I been doing it wrong the entire time? But it's not all or nothing. So I thought, what if I ran through what I was actually putting on these cards? So for dining, grocery and flights, those were on the Amex Gold and the Amex Platinum. That's what I'm already doing. So I guess, no, I'm not doing it wrong. If I actually just wanted the cash back, I could just cash out all those Amex points and I

I'd probably open up the Schwab Platinum so I could cash them out at 1.1 cents. So if I wanted cash back for my Amex points in those categories, I'm doing a good job.

Then on the rest of travel, in the points world, I would be building up a balance with a Chase Reserve card. And if I felt like booking in the portal was reasonable, then I would actually get about 4.5% cashback, which is the same as the Altitude Reserve. So, okay, travel category, what I would be doing for cashback or team points, it doesn't matter, it's all about the same. So no real issues there.

And then let's move to the next one, which was a big category of a spend for us, which was Amazon. The best points card for Amazon, without going down the rabbit hole of cards with spending caps, is a 2X card, like the Venture X. But the Amazon Prime card is 5% back. So if you're earning points like this, you are effectively paying two and a half cents for each of them, which is definitely not a good deal. However...

It turns out I've actually already evaluated this specific one in isolation before. I actually use my Amazon card for all Amazon and Whole Foods purchases, and I do not earn points there. I did dabble a little while ago in buying Amazon gift cards at a grocery store, getting Forex points, which would probably push the balances here towards points a little bit, depending on how you valued them. But I will just say that it felt like a little bit of a hassle.

And I was trying to both optimize but not over optimize because at the end of the day, time is also really valuable. And that's one thing that I'm trying to control. Now let's talk about another big category, mobile wallet. And this is where I'm probably doing things all wrong. By using a 2X card every time I go to Costco, instead of the altitude reserve where I could be getting four and a half percent back, I'm effectively paying 2.25 cents per point.

which is not a good deal. We've already established that there's probably easy ways to buy points for anywhere from one to one and a half cents. So paying 2.25 seems crazy. Honestly, this is where I think I need to make a change going forward. And then finally, it's the everything else category, which is a really big category for me and feels like a place where I've been getting two points where I could now be getting 3% back. And fortunately for a moment, I was like, gosh, have I been doing it wrong here too? And then I realized, no, this 3% back card

only just came out. I don't even have access to it yet. So maybe I'm about to be doing things wrong, but I can't look at it in the past. It effectively means that by using a VentureX instead of a Robinhood card, I'm paying one and a half cents per point. Now, this one's right on the edge because, yeah, you could maybe find a way to get points for a little bit cheaper than that. However, it would be a lot of hassle. If you assume we're not using the Robinhood card because it's not out yet, or at least not for me, and you look at the Bank of America premium rewards,

That 2.625% versus 2X is like buying points at 1.31 cents per point, which I'm actually fine doing. So this cashback category is a little bit of a mixed bag, and I'll give you my opinion in a second. My big takeaway is that doing the best option that maximizes your return on a category basis and gives you some flexibility is amazing. So the fact that using the Amex Gold and the Amex Platinum for flights and dining and groceries is the best of both worlds, but

but I have points that I could cash back knowing that if I cash them out, I'd be getting just as good a value of using cash back from the start. Makes me feel good. But I probably need to start tracking how many of my everything else purchases could be on Apple Pay because getting four and a half percent back through the altitude reserve seems like a pretty meaningful option. And knowing that the browser might count, I'm going to start paying attention there. I'm

I'm actually probably going to go in and look into Copilot, which is the budgeting app I love, and look how many of the categories of things that are in that everything else category I could have used Apple Pay. Obviously, if you love Copilot, you can get a two-month free trial. Just use the promo code HACKS2, and that's a number two. As for the Robinhood card, I think what I'm going to do is actually get the card. It seems so crazy, counter to the last 20 years of my life.

But in the spirit of experimentation, which I love to do, I think I'm going to get it and just see what it feels like to earn cash back. Maybe the first time I swipe the card, my gut just can't handle it. And I put it back in my wallet and I start paying with the VentureX again. But I could be wrong. So maybe I'll give myself a month of what that felt like. How do I feel? I honestly don't know. I'll share about how that experience goes. If you want to try the same, allthehacks.com slash Robinhood is my referral link because I cannot start this experiment until I get the card.

In fact, this is probably a good time to remind you, if you're getting any card and you want to support me in the show, we have links to many cards at allthehacks.com slash cards. I would appreciate you using those links. But if the best deal is not there, please go to wherever you get the most points. Usually we have those best deals, but there are some cards that we don't have on that page.

So I totally understand. I always want you to get the best deal possible. My big takeaway before I throw a big wrench in all of this is that if you want to maximize, the best path forward is not to think about cashback and points as an absolute decision, but rather to think about how you personally value points and make the best choice on a category by category level of where you spend. I value points very highly. I think it would be a lot of hassle to have to go and

send money to friends or pay bills to generate points so I could go on a trip. But that doesn't mean I value them enough that I'm going to start spending money on Amazon on a VentureX and paying two and a half cents per point. Also, if you have spend in other areas, there might be other cards worth looking at on the office supply category, the Chase Inc. Cash, on the entertainment streaming category, the Capital One Saver or Saver One cards, drugstores, Freedom Unlimited, Freedom Flex,

And obviously, if you pay rent, then you definitely need to check out the built card where you can earn up to 100,000 points a year paying rent. That's also on the allthehacks.com slash cards page. So check that out if you are a renter.

We just did a little wardrobe spring cleaning and Amy and I are so excited about some of the new Viore gear we got. If you don't know Viore, they make some of the most amazing and versatile clothes. Everything is designed to work out in, but it doesn't look or feel like it at all. It is so freaking comfortable. You will want to wear it all the time. I know because I'm always wearing it. I'm wearing it right now. I recommend it to friends and I love having them as a sponsor today.

I know I just stocked up on a few pairs of core shorts, which are my go-to for running. I pretty much wear Stratotec tees every day. They're amazing. But I also picked up a few polos and the meta shorts, which I hadn't tried before, but so far I'm loving them.

Oh, and the performance joggers are definitely the most comfortable pants I own. I think I have three or four pairs. But Viore is not just for men, so if you need a last-minute Mother's Day gift, I feel really confident recommending it because my wife is in Viore as much as I am, and she loves her performance joggers too, as well as the new Halo hoodie. She also loves their sports bras and leggings. Honestly, I don't think you can go wrong with anything.

I think Viore is an investment in your happiness, and for All the Hacks listeners, they're offering 20% off your first purchase, as well as free shipping and returns on U.S. orders over $75. So you should definitely check them out at allthehacks.com slash Viore. Again, go to allthehacks.com slash V-U-O-R-I and get yourself some of the most comfortable and versatile clothing on the planet.

You know what spring cleaning should also be for? Your finances. And one place you definitely want to look is your wireless bill because I know way too many people who have been paying a fortune all while our sponsor today, Mint Mobile, has phone plans with unlimited talk, text, and data for $15 a month when you purchase a three-month plan.

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I just want to thank you, Quick, for listening to and supporting the show. Your support is what keeps this show going. To get all of the URLs, codes, deals, and discounts from our partners, you can go to allthehacks.com slash deals. So please consider supporting those who support us. So let's get to this big wrench that might throw all of this off. The wrench is welcome bonuses. And the reason it might throw all this off is that the return on spending when you're earning a welcome bonus

is actually so big that it dwarfs pretty much every card out there. So let me paint this picture a little more clearly. I pulled up the 10 top signup bonuses that I've found in the last few years with the absolute best one being the Chase Reserve launch bonus, which you got 100,000 Chase Points, which are worth as much as an effective $1,500 of cash back if you just book travel in the portal for spending just $4,000.

I mean, think about that. You get $1,500 for spending $4,000, so you're earning 25 points per dollar. Just that one simple thing would get you an effective 37.5% cash back on your spend. And that's not even including the points you get on that $4,000 of spend. It doesn't matter what category you're spending money on, whether you're getting 5% or 3% cash back or 4x points or even 6x points, the return on that welcome bonus is absolutely unrivaled.

But I said that was the best bonus I've seen from an ROI standpoint. Keep in mind, I'm just limiting this to transferable points cards, so I'm not including some huge hotel bonuses. For example, right now, the IHG Premier card will give you 175,000 points for $3,000 of spend. So you're getting 58 IHG points per dollar. But if I look at the top 10 cards, all time, it was $71,000 of spend to get all 10 welcome bonuses,

But you'd get slightly more than 1.2 million points, which is about 17.3 points per dollar on average, which is wildly better than any other card for any category of spending. And even if you just value points at one cent, which is really low and really easy to get, that's 17.3% cash back. And so my initial reaction was, hey, that's just the 10 best welcome bonus offers. So the

I just looked at the top 10 welcome offers right now. Slightly different, but it's $60,000 of spend. It's actually less spend to get 1 million points, so less points, but it still averages 17 points per dollar or an effective 17% cash back. So clearly that is the best ROI focusing on welcome bonuses. But there are a few reasons why that strategy isn't perfect.

The best ROI is often on cards that require an average of $6,000 to hit the bonus, which means that if you spend $60,000 a year on cards, you're going to need to be opening up 10 cards a year. But if you spend $120,000 a year, that means you need 20 cards a year. Now,

If you have a player 2, which meaning a spouse who's also in this game with you, then 10-20 cards a year might not be impossible, but certainly takes a lot of planning and work and would be a tremendous amount more work to repeat 4, 5, 6, 7, 8, 9 years in a row. One alternative though could be going after cards with a lower percentage return but much higher spend bonuses.

For example, the VentureX business card right now will get you 210,000 points after you spend $30,000, which is only an average of seven points per dollar, shy of that 17 point limit. However, if you and your player two did that card each,

It would cover the entire $60,000 of spend and still give you a better return than every single cashback or points card I know on any category. And by the way, it's much more manageable than opening 10 or 20 cards. Even if you do have a player two and are okay managing 10 card openings a year, the sequencing really does matter. And that's important to figure out because every issuer and even every card

has specific rules about when you're eligible to open it and when you're eligible for the bonus. For example, we've talked about the Chase 524 rule where you can't have more than five or more cards opened in the past 24 years to get approved for another Chase card. There's also this 290 rule where you can only get two Amex cards in 90 days. And then a lot of the Amex cards have rules about when you're eligible for different bonuses.

I'm actually thinking I'll just do a whole episode on card approval rules so you make sure you know when you're eligible for a welcome bonus and when you're going to get approved for a card. But just to be clear, this is very possible. I remember this amazing post on Twitter that I'll link to in the show notes where this guy and his wife in 2017 opened 26 cards.

And in one year, they easily earned over 2 million points and their credit scores went up the entire time. They started at 670 and 794 as their credit scores and actually ended up at 798 and 805. So it's not impossible to convert all of your spend to welcome bonuses.

But for me, I'm probably going to end up with a hybrid approach where I maximize my return on the spend from cards in line with what I've done in my card tool without focusing on welcome bonuses. But three to four times a year, when we see an amazing welcome bonus, we'll jump on it, especially if it's one that might have a lower rate of return than 15 to 25 points per dollar, but that has a high amount of spending and an even bigger bonus. So yes, you might get the best bonus for

25,000 points on $2,000, but I'm much more interested in a 250,000 points on $20,000 bonus because I get a similar return, but only having to open up one card to spend a lot more and get a much bigger bonus. So I'm going to be focusing on the absolute point return instead of necessarily ROI for each welcome bonus.

Okay, a little interruption. After I recorded this episode, I was reading some listener emails and I came across another thing that you might want to consider that's similar to welcome bonuses, and it's 0% APR cards. If you pair them with the current interest rate environment, they become pretty interesting too. So I looked and 17 of the 43 cards I put in the card tool actually offer 12 to 15 months of 0% APR, which means you can spend up to your limit

and for at least a year, only make the minimum payment, which is for most issuers, only 1%, and have no interest to pay and no penalties. What it also means is that you can take whatever balance you would normally pay off and start earning 5% or more with something like the Wealthfront Cash account or another high-yield savings account. So for example, if you had a $20,000 balance that you invested for 12 months, that's the

That's $1,000 of interest, which is taxable, so maybe let's call it $700, though obviously your own marginal tax rate applies. That means it's the equivalent of a 3.5% return on spend, but that's in addition to any points or cash back you'd be earning on the card and any welcome bonus you'd get. And while the best cards out there, or at least the most premium ones, don't have 0% APR offers, there are some great opportunities.

For example, the Wells Fargo Active Cash Card has 0% APR for 15 months, a $200 welcome bonus, and earns 2% back. So if you opened it and quickly got up to a $20,000 spend, you would end up with a $200 bonus, a $400 of cash back from 2%, and $700 in interest after you adjust for the taxes, which is $1,300 on $20,000 of spend.

which is effectively 6.5% cash back, not back.

A few other interesting options out there are the Freedom Unlimited, the Freedom Flex, Capital One, Saver One, City Custom Cash, and the Bank of America Customized Cash. They all have 12 to 15 months of 0% APR. And so you should be able to get above that standard 3% Robinhood cash back rate, maybe even higher than six and a half in the Wells Fargo example with one of these 0% APR cards if you're investing the balance instead of paying it off. Obviously,

Obviously, the credit limit you get on these cards plays a big role in how much value you can get. But if it's a Chase card, it's really easy to call and shuffle your credit around. So maybe you only got approved for a $20,000 limit. But if you have four Chase cards with $20,000 limits, it's not hard to move that credit around. So your new 0% APR card might have a $40,000, $50,000, $60,000, $70,000 limit.

Okay, that was just this new idea I wanted to share, give you one more thing to think about, not that we needed more. Let's get back to my wrap up on the original episode. My final summary and takeaway. Here's how I'm thinking about things.

I'm going to continue going after the biggest welcome bonuses three to four times a year that I find them. In the categories where we talked about cashback being a better ROI, I'm probably going to stop focusing on points. That's definitely the Amazon Prime card, probably the Altitude Reserve card. As for the big question, which I'm calling the battle of the everything else card, do I keep going 2x points or 3% cashback? Even just since I last said that I think I'm going to do it,

I've been debating in my head, but I think I'm committed. I'm going to get the card. I'm going to see how it feels. I will share everyone how that goes. As soon as I get approved,

Again, three links for you before we wrap. Allthehacks.com slash Robinhood if you want to help me move up that line. Allthehacks.com slash cards if you want to sign up for any cards and support the show. And then allthehacks.com slash card tool. I really like it. I really want feedback. So if I missed anything in this episode or if you're using the tool and you want to share feedback or have questions, podcast at allthehacks.com is where you can get in touch. I will see you next week.